Of course, your student loan balance and interest rate may be higher or lower. By using a student loan calculator, you can see your specific financial benefit. The point is you can save substantially on your student loans by making even small, additional payments in each month.

Remember, there is no prepayment penalty for making an extra student loan payment or increasing your monthly payment. So, you can pay off your student loans anytime with no extra fee.

The power of compounding interest can really hurt your bottom line, which is why it’s essential to reduce principal. Slightly increasing your monthly payments are one way to get you there. After adjusting your monthly payments, make sure to update your payment amounts on autopay so you aren’t late on your student loan payments.

Notify Your Student Loan Servicer

Finally, and most importantly, notify your student loan servicer (the company that manages your student loan payments) in writing that you want any amount above your minimum monthly payment to be applied to reduce your principal student loan balance. This is critical because reducing your principal balance is what saves you interest.

Absent these instructions, any excess payment amount would be held until the next payment month - which defeats the purpose of saving interest.